Inheriting her love for property from her parents; Summer’s contractor father and real estate agent mum have always drilled into her that real estate tops the list when it comes to investments. Elaborating on how her mother fuelled her passion for property, Summer shared, “I’ve been following and learning from her for as long as I can remember – going to auctions, looking at listings, attending meetings with bank managers and scouting out residential neighbourhoods.”
My mother’s word of wisdom has always been, “Save up for your own property first, you can always get a sporty new car later!’’ reminisced Summer. The rationale was – not only is a car a depreciating asset, the monthly instalment is an obligation she cannot afford whilst saving up for her first down payment. Also, not having an existing pre-payment will boost the score of her debt to service ratio when applying for a home loan.
It was also through her parents’ guidance where Summer learnt that it is never too early to start saving up for her first 10% down payment. Sharing her own experience, Summer said that she started her ‘squirrel fund’ during her high school years itself by taking on part-time jobs and practising prudence with her spending.
Getting Ahead of the Pack
When her company director alerted her to the potential of rental properties in Iskandar Puteri (IP), one of the flagship zones of Iskandar Malaysia in 2012, 21-year old Summer was intrigued. Having just joined an outsource property marketing company after completing her marketing degree, Summer saw it as a sign to get her foot on the property ladder.
She got in on the action and researched the area, looking at developers’ projects and did her due diligence on the rental demand from tenants. She ended up securing her first property a month later; a RM300,000 serviced apartment measuring 573 sq ft. The property is now valued at RM50,000 more and Summer has been pocketing a cool RM1,200 in rental earnings each month.
Over the next two years, Summer went on to purchase three terrace houses in Desaru, using her passive income and with some financial help from her parents. All three units have been providing her with a steady stream of rental income as well. Her recent purchases were in 2015 – she pooled resources with a few friends to jointly purchase 2 high-rise units in Johor Bahru. Once completed, they plan to lease out the apartments as short-term vacation rental homes.
According to Summer, her mentor played a big role in her property investment journey – besides location, he taught her that one must put in the time and effort to study the development trends in a potential area.
“Why would people want to live there? Does the demand for residential units outstrip its supply? These are two very important questions – investing in a market which has already reached its tipping point is a recipe for disaster,” Summer shared.
This mantra has proved its clout – by adhering to her mentor’s tips, Summer had never been short of tenants for her apartment unit in IP as well as for her landed units in Desaru, which neighbours the thriving industrial zone of Pengerang.
Nevertheless, she shared that the best advise her mentor has ever given her was, “If you ever want to be a successful investor, you must buy a property!”
‘’This made me realise that you cannot be an armchair expert – the learning is in the doing of it,’’ Summer says.
Providing counsel on rental properties, Summer recommends to carry out minor interior design works to increase a unit’s appeal. “I believe that some styling will go a long way in boosting the property’s value. Look for basic improvements that provide big impacts – a cheery coat of paint, changing the light fittings and basic upgrades to the kitchen and bathroom,” she explained.
Summer’s own renovation efforts for her four properties have proved fruitful – her ‘cosmetic’ projects added value to her properties, hence she was able to charge higher rent for them. To top it off, there is an added plus – as her refurbished units appeal to the working professionals and middle-income earner crowd, she has never encountered any problems when it comes to collecting rent.
Summer’s main goal in investing is to become financially secure. She sees herself building her rental property portfolio in the next 5 to 10 years. “The passive income earned from property gives me the option to work because I want to and not because I have to. And I have my parents and mentor to thank for my good fortune,” beams Summer.